What is an Aggressive Investor? FX

6 min readDec 19, 2020

What is an Aggressive Investor?

An aggressive investor in forex trading is someone willing to take on higher risk in an attempt to maximize his profits. Very aggressive investors are comfortable withstanding larger drawdowns if they can capture more gains.

The key characteristics of an aggressive investor can be summarized into 3 elements:

Open to more risk through the use of leverage or bigger position sizing.
Aims to generate quick profits through day trading.
Seek to generate alpha returns and beat the market performance as measured through the S&P 500 index.

On the opposite spectrum, we have conservative investors, which are risk-averse.

In other words, conservative investors prefer more balanced returns which is why they avoid high-risk investments. So, the difference between conservative and aggressive investors is not just about the risk taken, but also about the type of investments they choose.

For example, government bonds along with safe-haven assets are the preferred investment vehicles for a conservative investor. On the other hand and aggressive investor will choose stocks, commodities, ETFs, or currencies, which have a higher risk and are more volatile. Volatility and risk are strongly connected. Volatility leads to more opportunities to earn returns on your investment, but at the same time, volatility also increases the likelihood of a specific position losing money.

Let’s see when it’s the best time to use aggressive stock trading.

When Aggressive Trading Works Best

Coming back to the process of risk-taking, you can lose money even if you have the best aggressive investment strategy. Speculation is inherently risky. Not only the lack of training but also the market conditions can affect our ability to grow your capital. Also, check out this guide to find out how much capital you need for day trading.

So, we have to learn what market conditions are good to take on more risk.

The idea behind aggressive trading is taking on more risk and subsequently accepting a larger loss. Risk-tolerant traders will grow their portfolios by taking ten steps forward and five steps back. This is different from other trading strategies, which are more focused on taking just one step at a time.

But, we’re only going to accept more risk when the market is conducive to our trading style and our strategy. So, this is going to differ from trader to trader and the strategy you’re using.

For example, if you prefer a high-volatility environment, you only want to risk more in this type of environment. So, the plan is to press the accelerator pedal a little bit harder than we perhaps do in a low volatility trading environment.

There is no one-size-fits-all trading approach.

Certain things will only work under certain market conditions.

Next, we’re going to pull down the curtain and reveal some aggressive stock trading strategies that work.

Aggressive Trading Strategies

In this section, we’re going to cover 4 methods to trade aggressively.

There are many ways investors can optimize gains and aggressive trading is one of them. However, far more important is the ability to remain patient and only strike when the ideal trade setup shows up.

So, it’s not just about finding aggressive market behaviors, but also your ability to remain patient.

Otherwise, your own human nature will work against you and sabotage all your efforts in your quest to become more efficient. As we have discussed at length before, the effects of trading psychology can be very damaging to your portfolio.

If you’re an impatient trader and try to use aggressive trading strategies, it will typically lead to disastrous results.

So, before you attempt any of the aggressive stock trading methods outline below, make sure you first work on yourself. If you’re not confident in your current trading strategy, start by trading on paper.

Let’s dive into the first aggressive funding strategy.

#1 Add to Winners

Adding to winners as the market moves in your favor is probably the easiest method to chase profits.

The perfect time to scale into your position is when the market moves in your favor and then pauses for a short period of time. Repeat the process and continue to add on each pause or pullback.

The theory behind this aggressive trading strategy is to let the winner run and then add some more to increase your profit potential.

How Does Forex Trading Work?

In other words, George Soros is saying that what matters is “how much money you make when you’re right and how much you lose when you’re wrong.”

If your initial trade is showing you a profit that’s a sign the market has proven you right. So, you want to maximize the outcome of your trades when the market proves you right.

Of course, the downside is that when you go aggressive you leave yourself vulnerable.

When you’re averaging into a trade, you always bring your average cost (price) closer to the market price. So, a deep pullback can wipe out your profits.

How it Works

#2 Trading More Markets

Adding more markets into the mix is another way aggressive investors make more money.

When you trade more markets, you trade more frequently and subsequently have more risk.

For example, you can include aggressive shares like penny stocks, which can potentially produce higher gains.

Aggressive trading works a little bit differently than conservative trading.

As we already learned, aggressive portfolios tend to favor stocks. Conservative portfolios, on the other hand, tend to favor bonds.

The good news is that on the US exchanges, we can get access to the best stocks in the world.

The next idea we’re going to look into is how to find early entry points for aggressive trading strategies.

What to Look for in a Forex Signal Provider

#3 Aggressive Trading Entries

An aggressive entry allows traders to enter the market right from the beginning of the price movement. In other words, we’re looking to catch tops and bottoms.

Here is what billionaire hedge fund manager Paul Tudor Jones had to say about catching tops and bottoms.

“Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms.”

However, for this to work timing the market needs to be on point.